Thursday, November 1, 2007
There was a hearing in Tennessee yesterday on the Genesco/Finish Line litigation. There is no transcript, but my source at the hearing reported the following:
Some of the takeaways from yesterday hearing include; GCO, Finish Line (FINL), and UBS will present a list of trial witnesses by December 5. Documents requested in discovery can extend as far back as February 3 of this year. GCO's lawyer Overton Thompson said that worse-than-expected quarterly earnings were a "short-term hiccup" that isn't uncommon in the fashion retail industry; FINL attorney Robert Walker said "Had we known that... the third quarter would look like it looks now, we would not have signed this deal."
Nothing particularly exciting. Genesco's lawyer here is playing to the decision in IBP v. Tyson which requires that any adverse effect be long-term in nature in order to be a material adverse effect. I don't have enough information otherwise to make meaningful commentary but it appears that Genesco's arguments are going to be based on the above plus an argument that any adverse change was one which affected the industry generally, an event which is specifically excluded from the definition of Material Adverse Change under the Genesco merger agreement (for more on these arguments in the context of Genesco see here).